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Commodities-Gold rallies and crude oil declines after Trump's tariffs

The price of crude oil fell on Wednesday and the price of gold rose after U.S. president Donald Trump announced tariffs on U.S. imported goods. This move fueled a global trade conflict and raised concerns about a possible economic slowdown.

Grain futures declined ahead of Trump's announcement of tariffs. They were likely to continue their losses, as traders waited for retaliatory action from global importers who are easy targets of retaliation.

Aluminum prices fell on Wednesday as investors weighed up trade action against supply concerns.

Trump announced on Wednesday that all U.S. imports would be subject to a baseline 10% tariff, and he'd impose even higher duties against dozens of major trading partners including China and the European Union.

Trading partners should respond to countermeasures with their own.

U.S. Stock Futures fell after the announcement.

Oil prices dropped to negative territory following a dollar-plus increase in the post-settlement market ahead of the announcement of tariffs on fears that a trade war could dampen demand.

The oil market has reacted negatively due to fears that the U.S. Tariffs will slow economic growth in the rest of the world and other countries may retaliate with tariffs," said Andrew Lipow of Lipow Oil Associates, based in Houston.

Grain futures fell on Wednesday, as traders feared that U.S. exports would suffer if Trump’s tariffs caused retaliation by major buyers such as China, the top soybean importer in the world, and Mexico, No. Mexico is the world's No. 1 corn purchaser.

Mike Zuzolo is the president of Global Commodity Analytics. He said, "We are likely to see a weaker open due to a weaker Asian Market." The dollar's weakness could offer support to the market.

(source: Reuters)